Bidding wars, first-day-on-the-market deals and even multiple offers are common again, especially in high-demand areas such as the Bay Area and Southern California.

But it’s definitely a tale of two states. For every San Jose or Los Angeles, there is a San Bernardino or Los Banos – cities where many homeowners are still struggling.

Many communities continue to deal with double-digit jobless rates – 20 of the state’s 58 counties had rates above 10% last month — and many homeowners remain severely underwater with their mortgages.

So, many homeowners could still benefit from Keep Your Home California. The free mortgage-assistance program has helped almost 33,000 homeowners, but many more could receive as much as $100,000, especially in the hard-hit regions of the state.

Keep Your Home California – a $2 billion, federally funded program – has four programs to assist struggling homeowners, with three of the programs designed to help with mortgage payments. The fourth, the Transition Assistance Program, helps homeowners with as much as $5,000 to relocate to new housing after they complete a short sale or a deed-in-lieu of foreclosure.

Of course, homeowners must meet county-by-county income requirements and their mortgage servicer must participate in the program. Homeowners must also face a financial hardship, such as a job loss, cut in pay, a divorce or extraordinary medical bills in order to qualify. A loan-to-value ratio of 140% or more now qualifies as a financial hardship under the Principal Reduction Program.

Homeowners flailing financially with severely underwater mortgages could receive a much-needed life vest – possibly as much as $100,000 in principal reduction from Keep Your Home California

The state-managed program will now consider homeowners with a loan-to-value ratio of 140% or greater as suffering a financial hardship, making them eligible for Keep Your Home California. It’s the latest change to the Principal Reduction Program, which has been expanded several times to help more homeowners since the program started in February 2011.

The $2 billion, federally funded program made the change after determining that there are still thousands of homeowners, especially in some of the hardest-hit housing regions such as the Central Valley and the Inland Empire, with loan-to-value ratios of 140% or higher. These homeowners have been sitting on the sidelines, hoping for some help with their severe negative equity. Under the recent change, the free mortgage-assistance program will help low and moderate income homeowners reduce their loan-to-value ratio to possibly 105%. For example, a homeowner who owes $280,000 on a home with a $200,000 value could have his principal reduced to $210,000.

Currently, more than 100 of the 160 mortgage servicers – including Bank of America and Wells Fargo Bank – participate in the Principal Reduction Program. These servicers manage a large majority of homeowners’ mortgages in California. Check the complete list of mortgage servicers participating at http://keepyourhomecalifornia.org/participating-servicers/.

And homeowners using the Principal Reduction Program must remain in their home for at least five years. If the homeowner sells prior to that date, they may be required to pay back the assistance from the proceeds of the sale of the home if there is enough equity.

The 140% or greater loan-to-value ratio only affects the Principal Reduction Program. The other three programs require more traditional financial hardships, such as a job loss, cut in pay, a divorce or extraordinary medical bills.

Keep Your Home California has helped more than 32,000 homeowners since February 2011.

Keep Your Home California

Keep Your Home California is a $2 billion federal program run by the state, focused on helping low and moderate income families avoid foreclosure, stay in their homes, and maintain an affordable mortgage payment for long-term homeownership.